New-home sales soared almost 8% in February as a snowy winter month failed to deter buyers as expected.
Sales of single-family homes rose to a seasonally adjusted annual rate of 539,000, up 7.8% from January, the Commerce Department said Tuesday. That dwarfed economists' median forecast for a 470,000 annual rate and a small monthly decline, according to Action Economics' survey before the report.
Instead, January's sales rate also was revised up to 500,000 from 481,000 previously reported.
February's rate was the highest since February 2008. The last time new-home sales had back-to-back months with rates at or topping 500,000 was in April-May 2008, according to Census Bureau data from Haver Analytics.
Preliminary figures released Tuesday show February sales rates compared with January's surged 152% in the Northeast, fell 13% in the Midwest, rose 10% in the South and fell 6% in the West. The South and West account for the bulk of the national total.
Economists caution that the monthly new-home sales data are volatile because the sample sizes are small and the seasonal adjustments can produce unreliable data. Last month's figures could be revised down in next month's report as more data come in.
Not adjusting the data for seasonal variations shows new-home sales for the past 12 months total 450,000 through February. That is the highest 12-month figure since January 2009, but the trend is still about the same total as the month before, says Richard Moody, chief economist of Regions Financial.
"Yes, the pace of sales is improving, but that improvement continues to come at a grudging pace," he said in a note to clients. "While we do expect the pace to increase steadily over the course of 2015, we nonetheless expect that increase to remain gradual."
The median price of homes sold last month was $275,000. On a seasonally adjusted basis, the supply of new homes for sale fell 1.6% from January but rose almost 13% from a year earlier.
Builders are modestly optimistic about their industry's prospects this year, citing shortages of lots and labor and tight loan underwriting standards as factors that continue to strain supply.
The National Association of Home Builders/Wells Fargo confidence index for March dropped two points to 53, the NAHB said on March 16. It was the third straight monthly decline. The index is seasonally adjusted.
Index readings above 50 indicate more builders view market conditions as good rather than poor.
Existing-home sales also have been modest. The National Association of Realtors reported Monday that February sales rose 1.2% to a seasonally adjusted annual rate of 4.88 million. That was a little short of economists' consensus forecast and below the average monthly rate of 4.92 million last year and 5.07 million in 2013.
Many forecasts call for improved home sales this year.
In buyers' favor, interest rates remain near historic lows. The average U.S. fixed rate on a 30-year mortgage has mostly hovered below 4% since October and was 3.78% last week, according to mortgage financier Freddie Mac. But recent reports say lenders are restricting loan approvals for applicants with less than superior creditworthiness.